Saturday, December 1, 2007

Charitable Checking Accounts

There is a trend towards people setting up charitable checking accounts in lieu of a charitable foundation to give away money.

The accounts administered by companies like Fidelity and Schwab allow investors it contribute assets and determine when and where to make distributions. Fidelity lowered the minimum investment to open an account to $5,000 - but many are in the $10,000 range, so they are now within reach for the average investor. If you contribute to a small handful of 501(c)(3) organizations the donor-advised checking accounts can offer lower fees and the money in the fund can grow tax free until distributions are made. The fees are generally in the 1% range and you can take a tax discount on contribution to the account the year they are made. Then again you could make the contribution outright and not pay Fidelity 1% to hold it in a special account.

For people looking to stroke their own egos, it's possible to name your CCA something like the "John Smith Charitable Foundation" and make it seem like you have a charitable foundation set up for yourself without the legal costs and paper work.

Read the whole article at about Charitable Checking Accounts at YahooFinance or read the better article on Starting a Charitable Checking Account at MSN.